India Mfg Optimism Soars Despite Cost Hikes

India's manufacturing sector demonstrated sustained growth and increasing optimism in the fourth quarter of FY26. Approximately 93% of surveyed manufacturers reported higher or same production levels compared to the previous quarter. This positive sentiment extended to domestic demand, with 89% of respondents anticipating an increase in orders.

Despite this growth, manufacturers are facing higher production costs, with nearly 70% reporting an increase as a percentage of sales. This rise is attributed to raw material expenses, currency depreciation, and escalating logistics and utility costs. Looking ahead, over half of the respondents plan capacity expansion in the next six months.

Challenges to expansion include geopolitical uncertainties, trade restrictions, and operational issues such as labor availability and raw material shortages. However, 60% of manufacturers expect high growth and suggest incentives for technology partnerships, R&D, and exports to promote new investments. Workforce availability is largely stable, though a need for skilled labor was noted.